Latevo lines up overseas insurer for 2018 crop season

Latevo is finalising a deal with an overseas insurer to underwrite its multi-peril crop insurance for next year’s growing season, CEO Andrew Trotter has told insuranceNEWS.com.au exclusively.

However, it will not offer cover for this year’s growing season.

“We haven’t pulled out of the market, as some reports have suggested,” he said.

“We have been looking overseas because no insurer in Australia has the expertise for this type of product.”

Latevo previously worked with Allianz, but in 2015 the insurer introduced its own crop product.

“We have been looking for a like-minded insurer that will enable us to launch a sustainable and transparent product for the Australian market,” Mr Trotter said.

“Insurers either underinsure or overinsure crop insurance, so it is a delicate balance between what the farmer can afford and adequately covering the risks.

“Australian insurers don’t have the agri-DNA to understand the market.”

He says Latevo has engineered its crop insurance down to providing cover at $15 a hectare.

“We have recalibrated the model and the assessment process to remove all paper forms, make it more affordable and easier for farmers,” Mr Trotter said. “Our aim is to get more farmers to apply so we can refine the program as much as possible for 2018.”

At a presentation to the fifth International Agricultural Risk, Finance and Insurance Conference in Paris earlier this month, Mr Trotter said Australian farmers are unfamiliar with insurance and do not embrace paperwork.

“Australian farmers have farmed for 40 years without multi-peril crop insurance, and croppers are real gamblers,” he told the conference. “They are creatures of habit and slow to change.”

Mr Trotter says grain farmers in NSW, Victoria and SA face drought conditions this planting season, but most are uninsured.

“Currently, there is not even 0.5% of grain growers… insured against crop failure. This is the drought we had to have, to wake up farmers and their advisers about taking out cover.”

There has been slow take-up of the Federal Government’s grant scheme to encourage farmers to buy crop insurance.

It is understood the program will be offered again next financial year. To encourage more farmers to apply, Latevo is offering to match the grants dollar for dollar.

“Growers who apply [to Latevo] before July 28 will get their assessment fully rebated,” Mr Trotter said. “We ask that brokers, bankers, accountants and key industry influencers take advantage of this opportunity and introduce this offer to their farming clients.”